The nonprofit health system based in Providence, Rhode Island, has tried thrice since the 1990s to reach a deal with Lifespan and Brown University. Separate discussions with Boston-based Partners HealthCare ended last month.
The board of directors for Care New England (CNE), based in Providence, Rhode Island, decided this week to quit flirting with the idea of reaching a deal with Lifespan and Brown University, at least for now.
The decision, which CNE President and CEO James E. Fanale, MD, and board chair Charles R. Reppucci announced Tuesday, comes less than six weeks after the latest round of three-party negotiations began. Rhode Island Gov. Gina M. Raimondo pushed for the parties to keep management control within her state, prompting Boston-based Partners HealthCare to abandon its efforts to acquire CNE last month.
Although the discussions among CNE, Lifespan, and Brown University were collaborative and respectful, the CNE leadership determined it would be in the organization's best interests to walk away, Fanale and Reppucci said in a statement, citing concerns over capital requirements, the expected financial stability of the combined system, antitrust considerations, the community's needs, and other factors.
The potential Partners-CNE combination had been nearing the finish line after two years of discussion when Partners withdrew its application last month, Fanale said.
"We spent so much time and energy doing that," Fanale said, as the Providence Journal's G. Wayne Miller reported. "We're kind of tired. When we earnestly tried to work on this [potential deal with Lifespan and Brown University], which we did, it just wasn't the right time to enter into another relationship."
Although the timing may not be right at the moment, CNE's leaders still see a merger in their future.
"Consolidation will continue to occur," Fanale told the Journal. "We have to continue to look for the right opportunity to do that. We're very strong for the time being. At some point we're going to have to do something. Going it alone is not a long-term strategy."
As recently as two years ago, CNE was losing $50 million per year, but not anymore, Fanale told an NBC News affiliate in Providence.
"We improved our performance dramatically. We've been in black for the last 18 months," he said.
"Do we need a partner at some point? We do. But we've improved our position remarkably in the last 18 months," he added. "We're not going to go down the drain, our cash position is better, so we're pretty optimistic about the future, absolutely."
When asked whether CNE expects to return to its talks with Partners, Fanale said there is "nothing imminent" planned, as The Boston Globe's Dan McGowan reported.
A spokesperson for Partners told the Globe that the organization values its clinical affiliation with CNE and remains committed to patients in Rhode Island, without answering whether the Boston-based health system will reinitiate merger talks.
Partners President and CEO Anne Klibanski, MD, who has since dropped the "interim" from her title, said last month that it would withdraw its application to acquire CNE but "look forward to reengaging at the appropriate time."
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Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.